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Supplier development: It's time to move beyond box-ticking

May 14 2018 15:00
Anton Ressel

As a business consultant and mentor, I have noticed a disquieting trend in the supplier development landscape over the years. A lot of companies seem quite comfortable doing the bare minimum to satisfy their scorecard needs.

Others take it further, trying to beat the system in a number of ways. This ranges from passing off enterprise development as supplier development (which has a material impact on their scorecard), to working with companies that are clearly fronting, or are simply rehashed and reconfigured versions of long-time suppliers.

On one hand, this 'middle finger' approach to what is essentially a legislated form of coercion is understandable. South Africa is probably one of the few countries in the world, if not the only one, where companies are told who they must work with if they want to continue doing business with certain demographics.

Sure, in other countries, especially in the developing world, there are targets around using local suppliers in a bid to promote regional economic development, and ensure that the benefits of a new mine or resort development are not just enjoyed by the implementing organisation.

However, given our tragic history, where so many were excluded from the economy for so long, we have understandably taken things to a whole new level.

Supplier development sets tangible and increasingly stiff targets around the support, development and use of small and emerging black businesses in the supply chain. It expects corporates (and also parastatals and public-sector procurement networks) to channel their business, or at least some of it, away from their traditional, known and trusted supplier base to a new and often unknown one.

This is understandably scary for a lot of big companies. What if the supplier fails? Do we have the time, resources and know-how to build up these suppliers to the level they are required to reach? Is it even worth the effort? These are just some of the questions that big business must be asking itself as it navigates the increasingly rigid B-BBEE Codes of Good Practice.

One question that really needs to be asked, however, is this: Can we afford NOT to embrace this process thoroughly and with an open and willing heart?

Supplier development, and its precursor, enterprise development, were conceptualised and developed for a reason. We have one of the most unequal societies in the world. For decades, most of our citizens were unable to dream of supplying a national or multinational company – or even a government department. The results of this system are our legacy.

Compared to similar developing countries, we sit with crippling levels of poverty in many areas, a huge wealth gap, and low levels of entrepreneurship endeavour.

Supplier development, if done properly and in the right spirit, can address many of these issues. It seeks, ultimately, to level the playing field, by making it unlevel for a period.

It compels companies with deep pockets and vast buying power to put that to good use by not only providing access to their supply chain for new and emerging players, but to play a tangible and active role in ensuring the success of these new players. This is how true transformation can be achieved.

As businesspeople, we have a choice to make in this country. We can keep ticking boxes and complying, or we can embrace this opportunity to grow and transform our economy by making space for people who have traditionally not been at the front of the queue. I hope we choose wisely.

* Anton Ressel is a business strategist, social commentator and writer. He is a director of the Fetola Foundation and founder and director of ARC Consulting, a small business specialist agency that offers mentorship, support and other services to entrepreneurs and emerging businesses nationally.

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anton ressel  |  small business  |  opinion  |  entrepreneurs
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